Kienlongbank’s chairman Vo Quoc Thang decided to give up the bank to manage businesses (Photo: baocongthuong.com.vn)Hanoi (VNS/VNA) - Cross-ownership in banks hasdecreased sharply after the banks recently changed their top leaders at the2018 annual general meetings of shareholders (AGMs) to meet the central bank’snew regulation.
The revised Law on Credit Institutions, which was passed bythe National Assembly and came into effect on January 15, 2018, prohibits bankleaders from taking up senior positions in other businesses.
According to banking expert Can Van Luc, many bank leadershad to resign as chair of the Board of Directors (BoD) or CEO of business firmsto manage banks. Meanwhile, some business owners also had to give up thechairmanship of banks to meet the requirement of the new law.
Prior to the central bank’s new regulation, it was a popularpractice for a person to both own a bank and a business firm. However, at thisyear’s AGMs, many bank leaders, such as Duong Cong Minh (Sacombank), Do QuangHien (SHB) and Do Minh Phu (TPBank), resigned as chair of the BoD in businessesto devote their time and expertise wholeheartedly to banks.
In contrast, Nguyen Thi Nga (SeA Bank), Vo Quoc Thang(Kienlongbank) and Vu Van Tien (ABBank) left the banks’s top positions tomanage businesses.
This is one of the most obvious examples of decreasedcross-ownership, said Luc.
Besides, Luc said, cross-ownership in banks is also bettercontrolled as many banks have recently listed on the stock markets. It meanstheir information, especially those related to internal management andownership rate of shareholders, must be made public and is closely monitored bythe State Securities Commission.
However, banking expert Phan Minh Ngoctold tinnhanhchungkhoan.vn that the cross-ownership trend is justtemporary and has not completely declined. The fact that SBV does not allowbank owners to concurrently own a business does not mean much to the reductionof cross-ownership because they can go around the rule if they want. In fact,some owners, despite holding a key position in businesses, can still run a bank.
Finance and banking expert Nguyen Tri Hieu said although thenew law had good impact on the transparency of ownership, functional agenciesstill must supervise the activity closely. In fact, in some cases, someindividuals, who do not take the bank leadership position still has the powerto govern the bank.
Obviously, in the short term, cross-ownership cannot beeliminated. However, according to experts, after weak banks overcome thedifficult time and the health of the entire banking system improves, SBV shouldsupplement regulations to disassociate the cross-ownership thoroughly,particularly in the relationship between banks and subsidiaries.-VNA/VNS
The revised Law on Credit Institutions, which was passed bythe National Assembly and came into effect on January 15, 2018, prohibits bankleaders from taking up senior positions in other businesses.
According to banking expert Can Van Luc, many bank leadershad to resign as chair of the Board of Directors (BoD) or CEO of business firmsto manage banks. Meanwhile, some business owners also had to give up thechairmanship of banks to meet the requirement of the new law.
Prior to the central bank’s new regulation, it was a popularpractice for a person to both own a bank and a business firm. However, at thisyear’s AGMs, many bank leaders, such as Duong Cong Minh (Sacombank), Do QuangHien (SHB) and Do Minh Phu (TPBank), resigned as chair of the BoD in businessesto devote their time and expertise wholeheartedly to banks.
In contrast, Nguyen Thi Nga (SeA Bank), Vo Quoc Thang(Kienlongbank) and Vu Van Tien (ABBank) left the banks’s top positions tomanage businesses.
This is one of the most obvious examples of decreasedcross-ownership, said Luc.
Besides, Luc said, cross-ownership in banks is also bettercontrolled as many banks have recently listed on the stock markets. It meanstheir information, especially those related to internal management andownership rate of shareholders, must be made public and is closely monitored bythe State Securities Commission.
However, banking expert Phan Minh Ngoctold tinnhanhchungkhoan.vn that the cross-ownership trend is justtemporary and has not completely declined. The fact that SBV does not allowbank owners to concurrently own a business does not mean much to the reductionof cross-ownership because they can go around the rule if they want. In fact,some owners, despite holding a key position in businesses, can still run a bank.
Finance and banking expert Nguyen Tri Hieu said although thenew law had good impact on the transparency of ownership, functional agenciesstill must supervise the activity closely. In fact, in some cases, someindividuals, who do not take the bank leadership position still has the powerto govern the bank.
Obviously, in the short term, cross-ownership cannot beeliminated. However, according to experts, after weak banks overcome thedifficult time and the health of the entire banking system improves, SBV shouldsupplement regulations to disassociate the cross-ownership thoroughly,particularly in the relationship between banks and subsidiaries.-VNA/VNS
VNA
